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Friday, May 31, 2013

The New Data Driven Ad Stack

In a data driven world, you live and die by the quality of your data…simple as that. Which is why there is a massive shift taking place in the ad tech marketplace right now, as CRM and paid media converge. Traditional CRM players (Oracle, Salesforce, IBM etc…) are now making aggressive moves to integrate paid media offerings as part of their overall solution.

Wait…what? CRM companies want to get into the paid media business? Most of us have been trained over the years to think of display & paid media as a purely branding focused, awareness driving…top of the funnel stuff. But guess what…it’s not. The rise of programmatic buying has lead to greater efficiency, targeting & reach for advertisers. Which translates into paid media actually being used successfully for direct response & performance based advertising. So it stands to reason that if paid media can be used to drive conversions you might as well target the people you know have a much higher likelihood of converting – your customers!

The limitation of email marketing has always been the fact that only a small percentage of your overall customer file will ever actually open your message. And the only real solution was to send more email…until now that is. We are now witnessing the intersection of paid media and CRM. As Bizo’s Russ Glass points out in this AllThingsD article – at the core of the data driven marketing revolution is the CRM database:

“With the CRM system as the system of record, seamlessly connecting all of the marketing systems in an enterprise, executing programs and then measuring success becomes possible — once the right data can be plugged in.”

And what is the data driven marketing revolution you ask? Well at LiveIntent we’d probably say it’s the ability to reach your subscribers everywhere…on the web, mobile, video, social etc…Because if I’m Walmart and I know that 80% of my email offers are going unread, I want to reach my subscribers, with my offer, anywhere and everywhere they are.

And how do you reach your subscribers everywhere? Email of course! Email is the only identifier that can be used to target offline CRM data, online. Which is why the CRM piece of the new ad stack is becoming so critical. Nothing beats first party data…as shown by Facebook, eBay, Amazon and perhaps now Twitter all creating advertising solutions that leverage their treasure trove of 1st Party CRM data. And now advertisers have the ability to use their own 1st Party CRM data to create addressable audience segments. It’s a 1st Party – Party!

In 2011 Forrester said that we are now living in the “Age of the Customer” – which meant putting the customer at the center of your business was required in order to compete in todays world. In another Forrester research piece titled “Embed The Customer Life Cycle AcrossMarketing”, Forrester says the following:

“By investing additional spend on retention marketing to increase share of wallet with existing customers, marketers are placing their money on a much surer bet – the people who have already demonstrated some level of affinity for the product or brand – than an indiscriminate cast out to the wider pool of potential shoppers or buyer.”

That just about sums it all up! Today’s landscape is extremely fragmented, with customers interacting with brands across multiple channels and now devices. If you’re going to invest in getting your existing customers to spend more of their dollars with your brand, you’re going to need to reach them everywhere. Putting your CRM database at the center of your ad stack enables brands/marketers to achieve this. A recent AdExchanger article highlighting Valueclick's Dotomi  business summed it up perfectly:

"Hello paid media, you're in the CRM business now."